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When will I receive my quarterly tax estimates?
If your onboarding is complete by the date listed below, you can expect to receive your estimate the month before the IRS due date.
If your onboarding is not complete by the date listed below, please click here to learn about the manual process
If you are unsure of your onboarding status, please email [email protected]
If Your Onboarding Is Complete By | Expect Your Estimate | For IRS Due Date | Using QBO/Xero Activity Taken into Account |
February 29 | March 1 - April 10 | April 15 | January 1 - February 29 |
April 30 | May 1 - June 10 | June 15 | January 1 - April 30 |
July 31 | August 1 - September 10 | September 15 | January 1 - July 31 |
November 30 | December 1 - January 10 | January 15 | January 1 - November 30 |
Quarterly taxes 101
When you’re an employee, taxes are withheld from your paycheck, and these withholdings are applied to your final tax bill. As an S Corp, taxes are withheld from your paycheck for your salary, but these taxes don’t fully account for your S Corp’s pass-through profits. That’s where your quarterly taxes come in.
Every quarter, the government requires that you pay estimated taxes on those pass-through profits. Estimated taxes are due: April 15th, June 15th, September 15th (not for CA residents), and January 15th. If those dates fall on a weekend or holiday, the deadline moves to the next business day.
How we calculate your quarterly tax estimates
As a Collective member, you don’t have to worry about the hardest part of quarterly taxes- doing the math! We will take care of that for you. If you’re curious about how we crunch the numbers, here’s how we do it.
Our estimate is based only on your S Corporation activity, which means S corporation profit and the salary you pay yourself. We take your year-to-date business activity (income and expenses), year-to-date S corporation salary, and year-to-date tax withholdings from your salary and annualize these amounts to project your total taxable income for the year.
Annualizing means we use your year-to-date income to project the total amount of income for the year.
Example: You make $10,000 in S corporation profit in Q1 so by annualizing this number we predict that you will have $40,000 in S corporation profit for the year.
Once we have annualized your income and tax withholdings, we subtract your federal or state standard deduction, applicable qualified business income deduction, withholdings (tax you have already paid to the IRS and state), and any other tax payments you have made (and which you have informed Collective) to get your estimated tax payment.
Because these are estimates, we round the results to the nearest $100.
This calculation does not take into consideration any other income you receive throughout the year - such as interest, dividends, outside W2 income, or income from a business that is not included in your Collective membership. If you do have income unrelated to your S corporation, which does not have any tax withholding, we advise you to pay a larger estimate to cover the tax on that outside income.
Collective will not be liable for any underpayment penalty or interest resulting from not paying enough estimated taxes due to income generated outside of your S corporation.
How to receive the most accurate quarterly tax estimates
Because your quarterly tax estimates rely on your revenue and expenses, it’s important that your bookkeeping is up to date. If you’re a few months behind on your bookkeeping, now is a good time to catch up.
Here are some other tips for accurate quarterly tax estimates:
Connect QuickBooks Online/Xero and your business bank accounts
Don’t co-mingle personal and business transactions
Make sure to record all business expenses
If you missed any expenses, enter them manually in the books
How do I calculate my taxes manually?
If your onboarding is complete by the date listed below, you can expect to receive your estimate the month before the IRS due date. Click here to learn about the automated process.
If your onboarding is not complete by the date listed below, please read on to learn about the manual process.
If you are unsure of your onboarding status, please email [email protected]
If Your Onboarding Is Not Complete By | Run a QBO/Xero P&L For | For IRS Due Date |
February 29 | January 1 - March 31 | April 15 |
April 30 | January 1 - May 31 | June 15 |
July 31 | January 1 - August 31 | September 15 |
November 30 | January 1 - December 31 | January 15 |
Action
To manually calculate your quarterly tax estimate, please follow these steps. These steps are for a general rule of thumb and the accuracy will improve once you are fully onboarded. If you have any questions about these steps please email [email protected]:
Check the table above for IRS Due Date
Either, run a report from your QBO P&L for the date range indicated in the table above. Be sure to select "cash" as the accounting method and click run report.
OR run a report from your XERO Income Statement for the date range indicated in the table above.
If you live in a state that has a personal income tax, multiply your net income by the appropriate amounts: 30% to the federal government, and 5% to your state government.
If you live in a state that does not have a personal income tax, multiply your net income by the appropriate amounts: 30% to the federal government. We're looking at you Florida, Texas, and Washington.
Subtract any quarterly estimates you may have previously made. Then remit the remaining balance to each taxing authority.
Click here to pay the federal government.
Click here to pay your state government.
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.